Florida churches enjoy drop in insurance premiums

By Erik J. Alsgaard*

LAKELAND, Fla. (UMNS)-United Methodist churches in hurricane-prone Florida began 2008 with good news: a 22 percent decrease in the cost of property and casualty insurance premiums.

Compared with 2007, the total cost of premiums is expected to decrease by $4.1 million to about $15 million for the 750 churches in the Florida Annual (regional) Conference, according to Mickey Wilson, conference treasurer, and Mark Thomas, director of the Florida Conference Ministry Protection department.

"The exact percentage will vary from church to church," Thomas said. "It all depends on variables such as if the church purchased a new fleet of vehicles, increased the value of its buildings or built new facilities-things like that."

Florida's Ministry Protection office and committee leaders worked closely with Arthur J. Gallagher Risk Management Services, the conference's insurance broker, to develop the coverage package. The company solicited more than 35 quotes.

"I am very pleased to see our premiums drop after so many 'up' years," said Roger Bond, chairman of the Ministry Protection committee. "A 22 percent drop is great, and that's been done with a 33 percent increase in property coverage and other positive benefits."

Pooling risk
Across the United States, United Methodist churches obtain insurance coverage individually, through conference packages such as Florida's or increasingly through the 3-year-old United Methodist Property and Casualty Trust, a nonprofit company insuring approximately 5,000 churches in 19 annual conferences.

The trend is toward churches joining together to spread their risks across jurisdictional lines and even ecumenically, according to Irene Howard, PACT's chief executive officer.

"The law of large numbers really does work better with large numbers," said Howard. "The more of us that come together, the more risk we're able to assume and the cheaper insurance becomes.

The Florida conference experienced record-high premiums in the wake of Hurricanes Charley, Jeanne, Frances and Wilma in 2004-05, but now it is enjoying a market correction following several years of moderate weather, according to Thomas.

The conference's mandatory insurance program began in 1995 to help churches obtain coverage after Hurricane Andrew devastated parts of southern Florida in 1992. "The program as it stands now is truly tried and true," Thomas said. "We've gotten all the churches into it and also gone through a series of storms. We've been hit from all angles, and it is really working for the Florida Conference."

The recent decrease in premiums is good news on many fronts. Not only will the overall premium cost go down, the level of coverage will increase.

"For named storms, our coverage will increase from $46 million to $76 million," Wilson said. "For flood coverage, the total goes up from $10 million to $25 million. And the deductible for flood claims decreases from $25,000 to $5,000."

The coverage per incident for sexual misconduct and molestation also increases, from $5 million to $10 million.

With the exception of 15-passenger vans, Thomas said insurance costs for vehicles remain the same-the fifth consecutive year with no increase.

Single carrier
The claims-handling process also will improve in Florida, Wilson said. "In 2008, we will deal with one insurance carrier. In 2007, we had two, and in 2004 and 2005, when we had all those storms, we had four. It made for a real mess in trying to figure out which claim went to which carrier. We've eliminated that. One carrier, one claim, one call."

In 2007, the Florida Conference began a loss prevention and safety program that offers local churches an insurance and safety audit. Thomas and representatives from Arthur J. Gallagher evaluate church buildings and grounds, looking for ways to prevent claims before they happen.

The conference also is working actively to make sure that local churches accurately report the value of buildings and vehicles and the number and salaries of staff members.

In 2008, the total value of insured property will top $2 billion. The estimated payroll-which helps determine workers' compensation insurance costs-is $170 million, up nearly 18 percent from 2007. That includes salaries for all clergy and staff serving in the conference. The number of "employees" (for insurance purposes) is 8,573.

"And for the first time, we sat down face to face with the insurance carriers and explained what we're doing," Wilson said. "They were very interested to learn all the steps we have in place to keep our risks low."

*Alsgaard is director of communications for the Florida Annual Conference. A similar version of this story appeared in the conference's e-Review Florida United Methodist News Service.